Embattled PUC President Peevey Leaving under Fire in December

Friday, October 10, 2014
Michael Peevey

California’s Public Utilities Commission (PUC) President Michael Peevey, surrounded by scandal and calls for his resignation, announced Thursday that he won’t stand for reappointment after his second term expires in December.

Despite years of controversy at the PUC, the former president of Southern California Edison Company was considered likely to be reappointed by Governor Jerry Brown. But the release of questionable e-mails during a court proceeding over the deadly 2010 San Bruno gas pipeline explosion highlighted an overly cozy relationship with Pacific Gas & Electric Co. (PG&E) and specifically called into question some of his actions.

Around 7,000 e-mails were released earlier in the year and PG&E self-reported a few more (pdf) questionable ones this week after it became known the U.S. Attorneys Office was looking at 65,000 e-mails between the utility and the PUC over the past five years.

Peevey’s name was prominent in e-mails indicating encouragement for PG&E to contribute $1 million to the fight against a state proposition aimed at overturning California’s landmark greenhouse gas law, Assembly Bill 32, and $100,000 toward the 100th anniversary celebration of the agency.     

Earlier e-mails between PUC and PG&E officials discussed how to arrange for a favorable agency administrative judge to hear a rate-setting case related to the San Bruno explosion that killed eight people and leveled a neighborhood. The commission is set to vote on a proposed $1.4 billion penalty for the utility.

The San Bruno explosion and resulting investigations found years of negligence by the regulatory agency. A federal grand jury indicted PG&E on 12 counts involving safety violations for San Bruno in April. It accused the utility of allowing the system of natural gas pipelines in the Bay Area to decay.

“Despite knowledge of these deficiencies, PG&E did not keep a record-keeping system for gas operations that would ensure that pipeline records were accessible, traceable, verifiable, accurate and complete,” the indictment said.

The indictment was loaded with information from a National Transportation Safety Board (NTSB) finding in 2011 that PG&E was responsible for the blast. The utility was accused of repeatedly violating the federal Pipeline Safety Act by not having critical infrastructure data, not conducting proper inspections and not having a plan to identify and handle risks.

Peevey, whose wife is state Senator Carol Liu (D-Glendale), has been a power in Sacramento for decades. After leaving the private sector, where he was an energy executive and consultant, he was appointed PUC president in 2002 by Democratic Governor Gray Davis and re-appointed by Republican Governor Arnold Schwarzenegger in 2008.   

The PUC regulates the privately-owned electricity, gas and water providers, as well as the telecommunications and train industries. With responsibility for reigning in powerful natural monopolies, the commission is likewise vested with considerable power, operating outside the authority of the executive branch and directly controlling the rates utilities can charge.

State Senator Jerry Hill (D-San Mateo) was planning to introduce a measure Thursday calling for Peevey’s removal as president if Brown re-appointed him. That won’t be necessary. But Peevey’s imminent departure wasn’t enough for one of his arch-nemeses over the year, The Utility Reform Network (TURN).

They want a stake through his heart. “TURN is in no way satisfied that Michael Peevey has announced that he is not seeking reappointment to the CPUC,” TURN’s Mark Toney said. “TURN renews our calls for him to resign immediately, and for Governor Brown to replace him as president immediately.”

–Ken Broder  


To Learn More:

Embattled PUC Head Peevey Won’t Seek Reappointment (by David Siders, Sacramento Bee)

Public Utilities Commission Chief Michael Peevey Plans December Exit (by Marc Lifsher, Los Angeles Times)

State Senator Wants Legislature to Remove PUC President (by David Mills, San Francisco Business Times)

PUC Chief to Step Down (by John Howard, Capitol Weekly)

Embattled PUC Chief Michael Peevey To Step Down (by George Avalos, Oakland Tribune)

PG&E Releases More Troublesome PUC E-Mails amid Federal Inquiry (by Ken Broder, AllGov California)

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